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Federal Reserve to increase interest rates by 75 basis points

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Re: Federal Reserve to increase interest rates by 75 basis points

#101

Post by Victerius »

mjr00 wrote: post #87
mywittyname wrote: post #47

I'm skeptical that interest rate hikes will curb inflation. I'm even skeptical that a recession will curb inflation. We have significant shortages of so many products and services that people rely on and the only way I see the situation improving is if supplies increase, maybe dramatically. It's too difficult to curb demand for things like food and housing if the population is growing. Those are things we just need t…

> It's too difficult to curb demand for things like food and housing if the population is growing. It's also difficult (impossible) to curb demand for housing if housing is far and away the best investment you can possibly make, both in the short, medium, and long-term. Unfortunately, so many people in the west have their net worth tied up in their homes that policies directly targeting property values is political s…

> It's also difficult (impossible) to curb demand for housing if housing is far and away the best investment you can possibly make, both in the short, medium, and long-term.

Rapid population decline. The coronavirus helped in this regard.

Re: Federal Reserve to increase interest rates by 75 basis points

#102

Post by matwood »

mywittyname wrote: post #47

I'm skeptical that interest rate hikes will curb inflation. I'm even skeptical that a recession will curb inflation. We have significant shortages of so many products and services that people rely on and the only way I see the situation improving is if supplies increase, maybe dramatically. It's too difficult to curb demand for things like food and housing if the population is growing. Those are things we just need t…

> I'm skeptical that interest rate hikes will curb inflation. I'm even skeptical that a recession will curb inflation.

Or rates will eventually cause demand destruction to the current levels of supply - which we have seen a bit of. But you're right, this was definitely not the typical inflation event. If inflation is defined as too much money chasing too few goods, supply chain issues from covid absolutely led to an acute too few goods situation. And a war, leading to sanctions on Russia certainly didn't help the energy supply.

Re: Federal Reserve to increase interest rates by 75 basis points

#103

Post by pbk1 »

mjr00 wrote: post #87
mywittyname wrote: post #47

I'm skeptical that interest rate hikes will curb inflation. I'm even skeptical that a recession will curb inflation. We have significant shortages of so many products and services that people rely on and the only way I see the situation improving is if supplies increase, maybe dramatically. It's too difficult to curb demand for things like food and housing if the population is growing. Those are things we just need t…

> It's too difficult to curb demand for things like food and housing if the population is growing. It's also difficult (impossible) to curb demand for housing if housing is far and away the best investment you can possibly make, both in the short, medium, and long-term. Unfortunately, so many people in the west have their net worth tied up in their homes that policies directly targeting property values is political s…

> if housing is far and away the best investment you can possibly make, both in the short, medium, and long-term.

citation needed? genuinely curious - are there studies about long-term returns from housing vs. other asset classes (namely public equities)?

Re: Federal Reserve to increase interest rates by 75 basis points

#104

Post by chickenpotpie »

nodesocket wrote: post #10

Now if we can only get states (like California) to stop giving out stimulus payments (they literally calling it inflation stimulus; learn economics 101) and drop student debt forgiveness nonsense. The fed is trying to curb inflation, while politicians are trying to get re-elected at any cost, fighting the fed.

This is not economics 101 and it's more nuanced than that. Stimulus checks can make inflation go up, but they can also do nothing. And it's important what type of inflation it causes, because California is only giving it to lower income citizens. If you quadruple the price of sports cars by giving every low income person a check, you still helped out the most vulnerable people.

Re: Federal Reserve to increase interest rates by 75 basis points

#105

Post by dragonwriter »

BitwiseFool wrote: post #83
ParksNet wrote: post #66

Earlier quoted context omitted.

Easiest way to increase labor supply is to immediately increase the retirement age to 70. Welfare and retirement systems across the West are insolvent at current settings anyway.

What I find tragic is that 'we' had all this time to gradually increase the retirement age but didn't do so. I can totally understand the political backlash of trying to immediately increase the retirement age, as old people vote and young people don't. However I feel like forward looking legislators could have passed gradual increases on future generations. If we know life expectancy is gradually going upwards, why…

> What I find tragic is that 'we' had all this time to gradually increase the retirement age but didn't do so.

‘We’ actually did exactly that, over a 20 year period that just finished in 2020, under a law passed in 1983. (‘We’ also phased in increased incentive for delayed retirement past the nominal “full retirement age” at the same time, so that the actual maximum retirement age of 70 has substantially higher benefits—+24%-+32% depending on birth year—than the nominal “full retirement age” .)

https://www.ssa.gov/pressoffice/IncRetAge.html

Re: Federal Reserve to increase interest rates by 75 basis points

#106

Post by paganel »

codetrotter wrote: post #77
ParksNet wrote: post #66

Earlier quoted context omitted.

Easiest way to increase labor supply is to immediately increase the retirement age to 70. Welfare and retirement systems across the West are insolvent at current settings anyway.

Idk what the retirement age in other countries is but here in Norway I think it is currently 67. How much additional productive work do we realistically expect people to be able to supply, from age 67 to age 70?

Maybe not what the OP had in mind, but the more you work after a certain age (I’d say 60) the sooner you die because of that work, especially if we’re talking non-office work.

So, in a way, what the OP suggests will have a double “advantage”: people working longer, i.e. less pensions to pay, and people dieing sooner as they retire, so, again, less pensions to pay. Of course, it would suck massively for the common man, but that’s not an issue anymore, as nobody seems to care for the common man any longer.

Re: Federal Reserve to increase interest rates by 75 basis points

#107

Post by thatguy0900 »

BitwiseFool wrote: post #83
ParksNet wrote: post #66

Earlier quoted context omitted.

Easiest way to increase labor supply is to immediately increase the retirement age to 70. Welfare and retirement systems across the West are insolvent at current settings anyway.

What I find tragic is that 'we' had all this time to gradually increase the retirement age but didn't do so. I can totally understand the political backlash of trying to immediately increase the retirement age, as old people vote and young people don't. However I feel like forward looking legislators could have passed gradual increases on future generations. If we know life expectancy is gradually going upwards, why…

Young people arnt jazzed about raising retirement either. I would like to retire some day as well. Not looking forward to the future where I get to "retire" at 80 or 90 because the generation before me couldn't handle a budget.

Re: Federal Reserve to increase interest rates by 75 basis points

#109

Post by 01100011 »

aresant wrote: post #33
01100011 wrote: post #8

Funny that this would rocket to the front page so quickly. Shows where everyone's minds are at. A lot of folks were banking on a pivot by the fed but they failed to understand how seriously the fed now sees inflation. Sure, the fed could/should have raised even higher, but consider they need to orchestrate a less disruptive start to our next recession. They're still doing QT as well, which will also help tame inflati…

The stock market is usually the best indicator of investor sentiment - the consensus was a 75 bps increase, that's what the market got, and as a result the market sustained gains from today. https://finance.yahoo.com/news/stock-market-news-live-update...

We'll see where the market settles in a few days. I wouldn't read too much into today's price action. You're seeing a lot of options action in a low volume market. We're not even done with a big earnings week(cough, AAPL, cough).

Re: Federal Reserve to increase interest rates by 75 basis points

#110

Post by snarf21 »

mywittyname wrote: post #47

I'm skeptical that interest rate hikes will curb inflation. I'm even skeptical that a recession will curb inflation. We have significant shortages of so many products and services that people rely on and the only way I see the situation improving is if supplies increase, maybe dramatically. It's too difficult to curb demand for things like food and housing if the population is growing. Those are things we just need t…

I feel like until we catch up on covid demand, there will be short supply and inflation on the shortages. But let's not forget that the oil companies are price gouging now as punishment against growing green technology. This greatly increases the transportation cost of all goods and their components and can put upward pressure on wages to meet workers higher bills. I agree that raising interest rates will slow inflation but not curb it.
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